Where To Meet? The Answer May Have Surprising Consequences

In my experience, companies most often hold board and shareholder meetings at or near their principal executive offices.  As a result, many corporations hold their meetings in California even though they may be incorporated in Delaware, Nevada or some other jurisdiction.  Geographical convenience, however, can have unforeseen consequences.  Several provisions of the California General Corporation

Can A Corporation Be A Citizen Of California?

Notwithstanding the brouhaha engendered by Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) , the idea that corporations are “persons” can be found in numerous California statutes, including California Corporations Code Sections 18 (“‘Person’ includes a corporation as well as a natural person”); 15901.02(y) (“‘Person’ means an individual . . . corporation . . .”); and

Indemnity Agreements: Res Gestae Atque Gerendae

Can someone be indemnified against an unlawful act?  California Civil Code Section 1668 would seem to say “no”: All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or

CA Court Holds No Fiduciary Duty To Warrant Holders

Judges must perforce pick and choose from the record what facts to include in their written opinions.  As a result, opinions don’t necessarily tell the whole story and may omit important details.  Recently, for example, I read a blog post by Kevin M. LaCroix entitled “Blog Post Statements Held Actionable Under the Federal Securities Laws“.  When I read

Court Holds Corporations Have No Constitutional Privacy Right, But . . .

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Article I, Section 1 of the California Constitution provides that “all people” have an inalienable right of privacy.  Does this right extent to corporations?  Seemingly it would if corporations are considered “people”.  Some might cite the U.S. Supreme Court’s holding in Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) and argue that the

Do Indemnity Agreements Constitute Unlicensed And Unlawful Insurance?

Parties to all sorts of agreement negotiate over the allocation of risk.  A seller, for example, might sell goods at a higher price with a full warranty and at a lower price with no warranty. A corporate officer may insist on higher compensation in the absence of an indemnification agreement.  Do these risk shifting bargains constitute unlicensed and unlawful policies of

The Misleading Case For A Majority Vote Standard

Proponents of a majority vote requirement for the election of directors often decry the fact that under a plurality vote standard, a director can win with a single vote.  For example, the 2015 proxy statement of Nabors Industries Ltd. included the following argument by the Massachusetts Laborers’ Pension Fund in support of its majority vote proposal: Under the plurality vote standard,

The SEC Staff’s Position On Unbundling Gets Even More Weird

“Bundling” was a colonial American practice of unmarried persons sharing the same bed whilst being physically separated by a board or sack.  As might be expected, bundling had its critics.  One Henry Reed Stiles piously carped: Bundling – that ridiculous and pernicious custom which prevailed among the young to a degree which we can scarcely credit –

ISS Ignores Contrary Studies In Adopting Overboarding Policy Change

ISS released its 2016 Benchmark Policy Recommendations last Friday.  I had previously criticized ISS for its proposal to change its recommendation on withholding votes with respect to directors who sit on too many boards: In proposing this policy change, ISS cites surveys that reflect an increase in the time commitment required for board service. ISS

Society Warns ISS That Overboarding Policy Change Will Hurt Women And Minority Directors

Recently, I criticized ISS’ proposed changes to its policy on “overboarding”.  Therefore, I was pleased to see that I wasn’t a lone voice crying in the wilderness.  The Society of Corporate Secretaries and Governance Professionals also submitted a comment letter to ISS.  The Society echoed my observation that ISS had provided no evidentiary support for